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Bridgeport Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2025. Jim Alcide, controller for Bridgeport, has gathered the following data concerning inventory. At May 31, 2025, the balance in Bridgeport's Raw Materials Inventory account was $436,560. Alcide summarized the relevant inventory cost and market data at May 31, 2025, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Bridgeport's May 31, 2025, financial statements for inventory under the lower-of-cost-or-market rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Consider the following expanded data at May 31, 2025. Assume Bridgeport uses LIFO inventory costing

Bridgeport Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2025. Jim Alcide, controller for Bridgeport, has gathered the following data concerning inventory. At May 31, 2025, the balance in Bridgeport's Raw Materials Inventory account was $436,560. Alcide summarized the relevant inventory cost and market data at May 31, 2025, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Bridgeport's May 31, 2025, financial statements for inventory under the lower-of-cost-or-market rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Consider the following expanded data at May 31, 2025. Assume Bridgeport uses LIFO inventory costing

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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5 Bridgeport Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2025. Jim Alcide, controller for Bridgeport, has gathered the following data concerning inventory. At May 31, 2025, the balance in Bridgeport's Raw Materials Inventory account was $436,560. Alcide summarized the relevant inventory cost and market data at May 31, 2025, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Bridgeport's May 31, 2025, financial statements for inventory under the lower-of-cost-or-market rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Consider the following expanded data at May 31, 2025. Assume Bridgeport uses LIFO inventory costing. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total Cost $74,900 119,840 149,800 Date 92,020 $436,560 Inventory loss $ May 31 Replacement Cost $66,875 84,958 132,680 134,820 List of Accounts $419,333 (a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025. Sales Price $68,480 100,580 199,448 165,636 $534,144 (a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025. Net Realizable Value $59,920 90,736 180,081 149,800 $480,537 (a2) For the fiscal year ended May 31, 2025, prepare the entry to record the decline in inventory to market, if any, using the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter 0 for the amounts.) Account Titles and Explanation Normal Profit $5,457 7,918 Debit 19,795 16,478 $49,648 Credit
Transcribed Image Text:5 Bridgeport Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2025. Jim Alcide, controller for Bridgeport, has gathered the following data concerning inventory. At May 31, 2025, the balance in Bridgeport's Raw Materials Inventory account was $436,560. Alcide summarized the relevant inventory cost and market data at May 31, 2025, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Bridgeport's May 31, 2025, financial statements for inventory under the lower-of-cost-or-market rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Consider the following expanded data at May 31, 2025. Assume Bridgeport uses LIFO inventory costing. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total Cost $74,900 119,840 149,800 Date 92,020 $436,560 Inventory loss $ May 31 Replacement Cost $66,875 84,958 132,680 134,820 List of Accounts $419,333 (a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025. Sales Price $68,480 100,580 199,448 165,636 $534,144 (a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025. Net Realizable Value $59,920 90,736 180,081 149,800 $480,537 (a2) For the fiscal year ended May 31, 2025, prepare the entry to record the decline in inventory to market, if any, using the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter 0 for the amounts.) Account Titles and Explanation Normal Profit $5,457 7,918 Debit 19,795 16,478 $49,648 Credit
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